Carlyle outperforms rivals in latest earnings report

The Carlyle Group wasn't immune to the turbulent stock market in 4Q, reporting a loss of $10.1 million—a big difference compared to the $58.9 million in profit the firm reported in the same period a year prior. The caveat: Carlyle's private equity portfolio dipped just 2%, outperforming
Blackstone (down 2.9%),
KKR (down 8.3%, per Reuters),
Apollo Global Management (down 10.9%) and the overall S&P 500 (down 14%) by a wide margin. Still, Carlyle's stock dropped nearly 6% on Wednesday, settling at $19.24 per share.

Of course, in the opaque world of private equity, there is a range of metrics to determine success. So in an effort to make matters more transparent, publicly traded private equity firms have started touting distributable earnings as the ultimate measuring stick.

From that perspective, Carlyle's latest earnings report showed plenty of reason for optimism. The Washington, DC-based buyout shop reported pre-tax distributable earnings, the amount available to pay shareholders, of $210.5 million, a 35% YoY jump from the $155.8 million in 4Q 2017. A bulk of that total came from fee-related earnings of $175.4 million, up from $26.7 million in the same period a year earlier.

Carlyle finished 2018 with AUM of $216.5 billion, an 11% YoY jump. And that number figures to go up as the buyout shop deploys its seventh flagship fund, which closed on $18.5 billion in July, and its fifth flagship Asia fund, which brought in close to $6.6 billion a month earlier. And at the end of January, the Financial Times reported that Carlyle had raised nearly $1.6 billion for its fourth global tech fund after just three months of fundraising.

In its earnings call, Carlyle co-chief executive Kewsong Lee said he expects the firm to raise another $20 billion in 2019, as it inches toward a past promise
to raise a combined $100 billion by 2020.

David Rubenstein's shop certainly hasn't been shy to spend. In December, the firm announced it had agreed to purchase
StandardAero, a provider of aftermarket parts and maintenance for aerospace and defense industries, from
Veritas Capital for a reported $5 billion, including debt. And on the last day of the year, it completed a deal to acquire insurance company
Sedgwick from KKR for some $6.7 billion,
marking its largest US-based acquisition of the year.